(PZ) CSMG Technologies Reports Year-End Results

Published 8:35 pm, Friday, April 7, 2006

Net loss for the year was $3,261,409, or $0.17 per share, compared to a loss of $2,357,682 or $0.21 per share, in 2004. Without an impairment loss required by accounting standards, net loss for the year was $1,843,762, compared to a net loss of $2,357,682 in 2004. Prior to the impairment loss of $1,417,647 for 2005, the 2005 loss was $1,843,762, which is $513,920 below the 2004 loss.

Accounting standards require that long-lived assets or assets that are held for use in the future, be measured against net cash inflows to test if carrying values exceed fair values. The carbon dioxide separator equipment was originally installed in 2003, but due to litigation, no cash inflows have yet to be generated. Although CSMG Technologies recently secured a gas purchase contract and it favorably resolved litigation, no cash flow was generated prior to December 31, 2005. The CO2 equipment, therefore, was recorded as a zero value, with an impairment loss of $1,417,647 included in the 2005 operating expenses. While this affects the financial statements of the company, it does not affect the value of the equipment or the company's ability to execute contracts for gas sales.

Donald S. Robbins, president and CEO of CSMG, said, "We are moving forward with our landfill gas sales. In February, we signed a 10-year contract with DuPont to supply commercial quality landfill gas. DuPont will become the model for all commercial customers. We believe this is the first of many agreements to commercially supply green gas from landfills."

Robbins continued, "We also had important breakthroughs in our patented tissue welding/bonding technology in 2005. Most recently, the technology was successfully used in leak-proof lung resection and cosmetic surgery procedures, including breast reduction, breast implants, mastoplexy and abdominal plasty. In January, our Ukraine partner received its first order for this equipment. The Ministry of Health of Ukraine ordered 10 sets. We are optimistic about the potential for use of this technology in the United States and other countries."

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